How Title Services Have Evolved in the New Normal
Companies that provide property title search perform an important function of indemnity insurance for buyers in case the property they are looking at runs into any defects or losses. Over time, title services have evolved to become crucial in mortgage loan processing.
Until the mid-1800s, the concept was non-existent. This meant that buyers had no protection against a possible fraud or loss. They would simply have to pay the cost of the property upfront and hope the seller would deliver on their promises without cheating. Or one could approach a lawyer and rely solely on their opinion on whether the property was a good investment.
In 1868, a buyer – Mr. Watson – ran into a loss on a real estate investment because of a previous lien on the property. His lawyer had mistakenly declared the lien to be invalid. Mr. Watson went to court with the issue and the Pennsylvania Supreme Court ruled against him, stating that a seller couldn’t be held responsible for erroneous professional opinions of another.
This prompted the Pennsylvania legislature to pass an act allowing title services companies to come into existence to solve title issues. The first title insurance company, Real Estate Title Insurance Company of Philadelphia was incorporated in March 1876 so they would provide protection to mortgage and real estate buyers against losses from liens, defective titles and other issues. It promised to make real estate transactions secure and faster than before.
Title Search Today
At present, title services have evolved to include technology and digitization in their workflow. An abstractor puts together legal information on a property to uncover anything that could hinder the buying process. From outstanding property taxes to liens against the house, title companies provide buyers and lenders with every little detail about a property.
The pandemic has accelerated the adoption of technology in title companies, the challenge of the last 18 months was digitization of legacy workflows that relied on human interaction. But the industry has adapted quickly to the change.
More and more companies in the title industry are using remote online notarization to reduce physical contact. Signing closing papers in the presence of a notary public helps reduce frauds, so it’s a mandatory part of the mortgage process. Most states have now allowed notarization to go electronic, at least temporarily, to allow remote completion of the process keeping in mind the pandemic.
This has simplified the title services process for all stakeholders. Now, the title industry is hopeful that this trend will continue into the long term. For companies to stay relevant, adopting technologies into their everyday functioning is important to stay relevant. There has been a focus shift towards Blockchain technology in the Title industry, massive disruption will be witnessed in the days to come.
Need for Better Communication
With the whole process becoming more digitized and requiring fewer in-person meetings, title services companies need to focus on better communication and client servicing. Social distancing norms imply that title service providers have to find other ways to stay in contact with their clients and provide them all the necessary information. Omni-channel communication in the form of virtual chats, video calls and portals that give clients access to title search information has been a by-product of the pandemic.
Buyers are now more comfortable with online processes than in person. Title companies will have to find a way to make this more mainstream.
Things in the title search industry have changed drastically in the last 18 months as compared to the last decade. Companies need to keep up with the tide in order to service their clients better and do justice to the process. Allsec‘s title services can help the title companies meet the changing demand of the business efficiently.